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Name | Symbol | Market | Type |
---|---|---|---|
AdTheorent Holding Company Inc | NASDAQ:ADTHW | NASDAQ | Equity Warrant |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.01 | 2.50% | 0.41 | 0.41 | 0.425 | 95,419 | 13:30:55 |
Delaware | 47-4257046 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
2001 Westside Parkway | ||||||||
Suite 155 | ||||||||
Alpharetta, | Georgia | 30004 | ||||||
(Address of principal executive offices) | (Zip Code) | |||||||
Registrant's telephone number, including area code: (800) 935-5961 | ||||||||
Not applicable | ||||||||
(Former name, former address and former fiscal year, if changed since last report) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common Stock, par value $0.001 | PRTH | Nasdaq Global Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | ||||||||
Emerging growth company | ☐ |
Page | |||||
Term | Definition | |||||||
2018 Plan | 2018 Equity Incentive Plan | |||||||
2021 Stock Purchase Plan | Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan | |||||||
2022 Share Repurchase Program | Priority Technology Holdings, Inc. 2022 Share Repurchase Program | |||||||
2021 Share Repurchase Program | Priority Technology Holdings, Inc. 2021 Share Repurchase Program | |||||||
AP | Accounts payable | |||||||
ASC | Accounting Standards Codification | |||||||
ASU | Accounting Standards Update | |||||||
B2B | Business-to-business | |||||||
B2C | Business-to-consumer | |||||||
C&H | C&H Financial Services, Inc. | |||||||
CEO | Chief Executive Officer | |||||||
CFO | Chief Financial Officer | |||||||
Common Stock | The Company's common stock, par value $0.001 | |||||||
Credit Agreement | Credit and Guaranty Agreement with Truist Bank dated as of April 27, 2021 | |||||||
EAETR | Estimated annual effective tax rate | |||||||
EBITDA | Earnings before interest, taxes, depreciation and amortization | |||||||
EGC | Emerging Growth Company | |||||||
ESPP | Employee Stock Purchase Plan | |||||||
Exchange Act | Securities Exchange Act of 1934 | |||||||
FASB | Financial Accounting Standards Board | |||||||
FBO | For the Benefit Of | |||||||
FI | Financial Institution | |||||||
Finxera | Finxera Holdings, Inc. | |||||||
GAAP | U.S. Generally Accepted Accounting Principles | |||||||
IRA | Inflation Reduction Act, enacted by the U.S. Federal Government on August 16, 2022 | |||||||
ISO | Independent sales organization | |||||||
ISV | Independent software vendor | |||||||
JOBS Act | Jumpstart Our Business Startups Act of 2012 | |||||||
LIBOR | London Interbank Offered Rate | |||||||
NCI | Non-controlling interests | |||||||
PIK | Payment-in-kind | |||||||
PHOT | Priority Hospitality Technology, LLC | |||||||
SEC | Securities and Exchange Commission | |||||||
SMB | Small to medium-sized businesses | |||||||
Term facility | $620.0 million senior secured term loan facility issued under the Credit Agreement (including $320.0 million delayed draw facility) | |||||||
Total Net Leverage Ratio | The ratio of consolidated total debt to the Consolidated Adjusted EBITDA (as defined in the Credit Agreement) |
September 30, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 12,707 | $ | 20,300 | |||||||
Restricted cash | 11,624 | 28,859 | |||||||||
Accounts receivable, net of allowances of $1,026 and $555, respectively | 69,688 | 58,423 | |||||||||
Prepaid expenses and other current assets | 16,725 | 15,807 | |||||||||
Current portion of notes receivable | 986 | 272 | |||||||||
Settlement assets and customer account balances | 516,687 | 479,471 | |||||||||
Total current assets | 628,417 | 603,132 | |||||||||
Notes receivable, less current portion | 2,072 | 105 | |||||||||
Property, equipment and software, net | 29,773 | 25,233 | |||||||||
Goodwill | 365,347 | 365,740 | |||||||||
Intangible assets, net | 301,729 | 340,211 | |||||||||
Deferred income taxes, net | 12,058 | 8,265 | |||||||||
Other noncurrent assets | 10,353 | 9,256 | |||||||||
Total assets | $ | 1,349,749 | $ | 1,351,942 | |||||||
Liabilities, Redeemable Senior Preferred Stock and Stockholders' Deficit | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 50,955 | $ | 42,523 | |||||||
Accrued residual commissions | 32,593 | 29,532 | |||||||||
Customer deposits and advance payments | 3,111 | 5,021 | |||||||||
Current portion of long-term debt | 6,200 | 6,200 | |||||||||
Settlement and customer account obligations | 517,008 | 500,291 | |||||||||
Total current liabilities | 609,867 | 583,567 | |||||||||
Long-term debt, net of current portion, discounts and debt issuance costs | 593,068 | 604,105 | |||||||||
Other noncurrent liabilities | 13,583 | 18,349 | |||||||||
Total noncurrent liabilities | 606,651 | 622,454 | |||||||||
Total liabilities | 1,216,518 | 1,206,021 | |||||||||
Commitments and contingencies (Note 12) | |||||||||||
Redeemable senior preferred stock, $0.001 par value; 250,000 shares authorized; 225,000 issued and outstanding at September 30, 2022 and December 31, 2021 | 225,095 | 210,158 | |||||||||
Stockholders' deficit: | |||||||||||
Preferred stock, $0.001; 100,000,000 shares authorized; none issued or outstanding at September 30, 2022 and December 31, 2021 | — | — | |||||||||
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 77,789,291 and 77,460,312 shares issued at September 30, 2022 and December 31, 2021, respectively; and 75,981,186 and 76,739,896 shares outstanding at September 30, 2022 and December 31, 2021, respectively | 78 | 77 | |||||||||
Additional paid-in capital | 17,719 | 39,835 | |||||||||
Treasury stock at cost, 1,808,105 and 720,416 shares at September 30, 2022 and December 31, 2021, respectively | (8,765) | (4,091) | |||||||||
Accumulated deficit | (100,896) | (100,058) | |||||||||
Total stockholders' deficit | (91,864) | (64,237) | |||||||||
Total liabilities, redeemable senior preferred stock and stockholders' deficit | $ | 1,349,749 | $ | 1,351,942 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues | $ | 166,417 | $ | 132,542 | $ | 486,086 | $ | 370,853 | |||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of revenue (excludes depreciation and amortization) | 107,958 | 92,833 | 320,187 | 264,527 | |||||||||||||||||||
Salary and employee benefits | 16,384 | 11,909 | 48,231 | 31,808 | |||||||||||||||||||
Depreciation and amortization | 17,817 | 12,330 | 52,675 | 32,123 | |||||||||||||||||||
Selling, general and administrative | 10,178 | 7,220 | 27,027 | 22,213 | |||||||||||||||||||
Total operating expenses | 152,337 | 124,292 | 448,120 | 350,671 | |||||||||||||||||||
Operating income | 14,080 | 8,250 | 37,966 | 20,182 | |||||||||||||||||||
Other (expense) income | |||||||||||||||||||||||
Interest expense | (13,412) | (8,155) | (37,282) | (24,608) | |||||||||||||||||||
Debt extinguishment and modification costs | — | — | — | (8,322) | |||||||||||||||||||
Other income, net | 231 | 146 | 311 | 92 | |||||||||||||||||||
Total other expense, net | (13,181) | (8,009) | (36,971) | (32,838) | |||||||||||||||||||
Income (loss) before income taxes | 899 | 241 | 995 | (12,656) | |||||||||||||||||||
Income tax expense | 1,691 | 790 | 1,833 | 49 | |||||||||||||||||||
Net loss | (792) | (549) | (838) | (12,705) | |||||||||||||||||||
Less: Dividends and accretion attributable to redeemable senior preferred stockholders | (9,466) | (5,813) | (26,415) | (9,724) | |||||||||||||||||||
Less: NCI preferred unit redemptions | — | — | — | (10,777) | |||||||||||||||||||
Net loss attributable to common stockholders | $ | (10,258) | $ | (6,362) | $ | (27,253) | $ | (33,206) | |||||||||||||||
Loss per common share: | |||||||||||||||||||||||
Basic and diluted | $ | (0.13) | $ | (0.09) | $ | (0.35) | $ | (0.48) | |||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||
Basic and diluted | 77,984 | 71,979 | 78,392 | 69,689 | |||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Deficit Attributable to Stockholders | |||||||||||||||||||
Shares | $ | Shares | $ | ||||||||||||||||||||
December 31, 2021 | 76,740 | $ | 77 | 720 | $ | (4,091) | $ | 39,835 | $ | (100,058) | $ | (64,237) | |||||||||||
Equity-classified stock-based compensation | — | — | — | — | 1,558 | — | 1,558 | ||||||||||||||||
Vesting of stock-based compensation | 129 | — | — | — | — | — | — | ||||||||||||||||
Share repurchases and shares withheld for taxes | (27) | 1 | 27 | (157) | (1) | — | (157) | ||||||||||||||||
Dividends on redeemable senior preferred stock | — | — | — | — | (7,595) | — | (7,595) | ||||||||||||||||
Accretion of redeemable senior preferred stock | — | — | — | — | (805) | — | (805) | ||||||||||||||||
Net loss | — | — | — | — | — | (333) | (333) | ||||||||||||||||
March 31, 2022 | 76,842 | $ | 78 | 747 | $ | (4,248) | $ | 32,992 | $ | (100,391) | $ | (71,569) | |||||||||||
Equity-classified stock-based compensation | — | — | — | — | 1,542 | — | 1,542 | ||||||||||||||||
ESPP compensation and vesting of stock-based compensation | 157 | — | — | — | 57 | — | 57 | ||||||||||||||||
Share repurchases and shares withheld for taxes | (431) | — | 431 | (1,922) | — | — | (1,922) | ||||||||||||||||
Dividends on redeemable senior preferred stock | — | — | — | — | (7,732) | — | (7,732) | ||||||||||||||||
Accretion of redeemable senior preferred stock | — | — | — | — | (817) | — | (817) | ||||||||||||||||
Net income | — | — | — | — | — | 287 | 287 | ||||||||||||||||
June 30, 2022 | 76,568 | $ | 78 | 1,178 | $ | (6,170) | $ | 26,042 | $ | (100,104) | $ | (80,154) | |||||||||||
Equity-classified stock-based compensation | — | — | — | — | 1,104 | — | 1,104 | ||||||||||||||||
ESPP compensation and vesting of stock-based compensation | 43 | — | — | — | 39 | — | 39 | ||||||||||||||||
Share repurchases and shares withheld for taxes | (630) | — | 630 | (2,595) | — | — | (2,595) | ||||||||||||||||
Dividends on redeemable senior preferred stock | — | — | — | — | (8,636) | — | (8,636) | ||||||||||||||||
Accretion of redeemable senior preferred stock | — | — | — | — | (830) | — | (830) | ||||||||||||||||
Net loss | — | — | — | — | — | (792) | (792) | ||||||||||||||||
September 30, 2022 | 75,981 | $ | 78 | 1,808 | $ | (8,765) | $ | 17,719 | $ | (100,896) | $ | (91,864) |
Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Deficit Attributable to Stockholders | |||||||||||||||||||
Shares | $ | Shares | $ | ||||||||||||||||||||
December 31, 2020 | 67,391 | $ | 68 | 451 | $ | (2,388) | $ | 5,769 | $ | (102,013) | $ | (98,564) | |||||||||||
Equity-classified stock-based compensation | — | — | — | — | 558 | — | 558 | ||||||||||||||||
Vesting of stock-based compensation | 159 | — | — | — | — | — | — | ||||||||||||||||
Liability-classified stock-based compensation converted to equity-classified | — | — | — | — | 313 | — | 313 | ||||||||||||||||
Exercise of stock options | 90 | — | — | — | 617 | — | 617 | ||||||||||||||||
Net loss | — | — | — | — | — | (2,679) | (2,679) | ||||||||||||||||
March 31, 2021 | 67,640 | $ | 68 | 451 | $ | (2,388) | $ | 7,257 | $ | (104,692) | $ | (99,755) | |||||||||||
Equity-classified stock-based compensation | — | — | — | — | 821 | — | 821 | ||||||||||||||||
Vesting of stock-based compensation | 12 | — | — | — | — | — | — | ||||||||||||||||
Exercise of stock options | 30 | — | — | — | 204 | — | 204 | ||||||||||||||||
Dividends on redeemable senior preferred stock | — | — | — | — | (3,413) | — | (3,413) | ||||||||||||||||
Accretion of redeemable senior preferred stock | — | — | — | — | (498) | — | (498) | ||||||||||||||||
Fair value of warrants issued | — | — | — | — | 11,357 | — | 11,357 | ||||||||||||||||
Fair value of PHOT preferred units redemption | — | — | — | — | (10,777) | — | (10,777) | ||||||||||||||||
Fair value of common shares issued for PHOT redemption | 1,428 | 2 | — | — | 9,962 | — | 9,964 | ||||||||||||||||
Net loss | — | — | — | — | — | (9,477) | (9,477) | ||||||||||||||||
June 30, 2021 | 69,110 | $ | 70 | 451 | $ | (2,388) | $ | 14,913 | $ | (114,169) | $ | (101,574) | |||||||||||
Equity-classified stock-based compensation | — | — | — | — | 790 | — | 790 | ||||||||||||||||
Vesting of stock-based compensation | 20 | — | — | — | — | — | — | ||||||||||||||||
Issuance of acquisition Common Stock | 7,551 | 7 | — | — | 34,381 | — | 34,388 | ||||||||||||||||
Exercise of stock options | 53 | — | — | — | 369 | — | 369 | ||||||||||||||||
Share repurchases | (163) | — | 163 | (1,023) | — | — | (1,023) | ||||||||||||||||
Dividends on redeemable senior preferred stock | — | — | — | — | (5,286) | — | (5,286) | ||||||||||||||||
Accretion of redeemable senior preferred stock | — | — | — | — | (527) | — | (527) | ||||||||||||||||
Net loss | — | — | — | — | — | (549) | (549) | ||||||||||||||||
September 30, 2021 | 76,571 | $ | 77 | 614 | $ | (3,411) | $ | 44,640 | $ | (114,718) | $ | (73,412) |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (838) | $ | (12,705) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization of assets | 52,675 | 32,123 | |||||||||
Stock-based compensation | 4,204 | 2,349 | |||||||||
Amortization of debt issuance costs and discounts | 2,613 | 1,607 | |||||||||
Write-off of deferred loan costs and discount | — | 2,580 | |||||||||
Deferred income tax benefit | (3,567) | (160) | |||||||||
PIK interest paid | — | (23,715) | |||||||||
Other non-cash items, net | (154) | (39) | |||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable | (11,265) | (10,847) | |||||||||
Prepaid expenses and other current assets | (2,575) | (1,947) | |||||||||
Income taxes (receivable) payable | 1,003 | (1,541) | |||||||||
Notes receivable | 569 | (190) | |||||||||
Accounts payable and other accrued liabilities | 13,711 | 9,192 | |||||||||
Customer deposits and advance payments | (1,910) | 713 | |||||||||
Other assets and liabilities, net | (3,908) | 13 | |||||||||
Net cash provided by (used in) operating activities | 50,558 | (2,567) | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of businesses, net of cash acquired | — | (407,129) | |||||||||
Additions to property, equipment and software | (11,380) | (7,530) | |||||||||
Notes receivable loan funding | (3,250) | — | |||||||||
Acquisitions of intangible assets | (6,715) | (48,219) | |||||||||
Other investing activities | 250 | — | |||||||||
Net cash used in investing activities | (21,095) | (462,878) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of long-term debt, net of issue discount | — | 607,318 | |||||||||
Debt issuance and modification costs paid | — | (9,073) | |||||||||
Repayments of long-term debt | (4,650) | (359,875) | |||||||||
Borrowings under revolving credit facility | 23,000 | 30,000 | |||||||||
Repayments of borrowings under revolving credit facility | (32,000) | — | |||||||||
Proceeds from the issuance of redeemable senior preferred stock, net of discount | — | 219,062 | |||||||||
Redeemable senior preferred stock issuance fees and costs | — | (8,098) | |||||||||
Repurchases of Common Stock and shares withheld for taxes | (4,674) | (1,023) | |||||||||
Dividends paid to redeemable senior preferred stockholders | (11,478) | (4,015) | |||||||||
Proceeds from exercise of stock options | — | 1,190 | |||||||||
Settlement and customer accounts obligations, net | 25,695 | 396,338 | |||||||||
Contingent consideration for business combinations and asset acquisitions | (3,992) | — | |||||||||
Other financing activities | — | (814) |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash (used in) provided by financing activities | (8,099) | 871,010 | |||||||||
Net change in cash and cash equivalents, and restricted cash: | |||||||||||
Net increase in cash and cash equivalents, and restricted cash | 21,364 | 405,565 | |||||||||
Cash and cash equivalents, and restricted cash at beginning of period | 518,093 | 88,120 | |||||||||
Cash and cash equivalents, and restricted cash equivalents at end of period | $ | 539,457 | $ | 493,685 | |||||||
Supplemental cash flow information: | |||||||||||
Cash paid for interest | $ | 33,023 | $ | 17,043 | |||||||
Non-cash investing and financing activities: | |||||||||||
Treasury stock purchases settled after the balance sheet date | $ | 651 | $ | — | |||||||
Accruals for future contingent payments | $ | 4,825 | $ | 6,833 | |||||||
Notes receivable from sellers used as partial consideration for acquisitions | $ | — | $ | 3,499 | |||||||
Non-cash additions to other noncurrent assets for right-of-use operating leases | $ | 166 | $ | — | |||||||
Reconciliation of cash and cash equivalents, and restricted cash: | |||||||||||
Cash and cash equivalents | $ | 12,707 | $ | 16,974 | |||||||
Restricted cash | 11,624 | 17,258 | |||||||||
515,126 | 459,453 | ||||||||||
Total cash and cash equivalents, and restricted cash | $ | 539,457 | $ | 493,685 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Revenue Type: | |||||||||||||||||||||||
Merchant card fees | $ | 137,659 | $ | 122,175 | $ | 405,404 | $ | 348,244 | |||||||||||||||
Money transmission services revenue | 18,291 | 2,873 | 51,757 | 2,873 | |||||||||||||||||||
Outsourced services and other services | 7,933 | 5,778 | 21,917 | 14,981 | |||||||||||||||||||
Equipment | 2,534 | 1,716 | 7,008 | 4,755 | |||||||||||||||||||
Total revenues(1),(2) | $ | 166,417 | $ | 132,542 | $ | 486,086 | $ | 370,853 |
(in thousands) | Consolidated Balance Sheet Line Item | September 30, 2022 | December 31, 2021 | |||||||||||||||||
Liabilities: | ||||||||||||||||||||
Contract liabilities, net (current) | Customer deposits and advance payments | $ | — | $ | 1,280 |
(in thousands) | |||||
Consideration: | |||||
Cash | $ | 379,220 | |||
Equity instruments(1) | 34,388 | ||||
Less: cash and restricted cash acquired | (6,598) | ||||
Total purchase consideration, net of cash and restricted cash acquired | $ | 407,010 | |||
Recognized amounts of assets acquired and liabilities assumed: | |||||
Accounts receivable | $ | 385 | |||
Prepaid expenses and other current assets(2) | 5,298 | ||||
Current portion of notes receivable | 784 | ||||
Settlement assets and customer account balances | 498,811 | ||||
Property, equipment and software, net | 712 | ||||
Goodwill(2) | 244,711 | ||||
Intangible assets, net(3) | 211,400 | ||||
Other noncurrent assets | 955 | ||||
Accounts payable and accrued expenses | (7,837) | ||||
Settlement and customer account obligations | (498,811) | ||||
Deferred income taxes, net(2) | (44,018) | ||||
Other noncurrent liabilities | (5,380) | ||||
Total purchase consideration | $ | 407,010 |
(in thousands) | |||||
Accounts receivable | $ | 214 | |||
Prepaid expenses and other current assets | 209 | ||||
Property, equipment and software, net and other current assets | 287 | ||||
Goodwill | 13,804 | ||||
Intangible assets, net(1) | 25,400 | ||||
Other noncurrent liabilities | (214) | ||||
Total purchase price | $ | 39,700 |
(in thousands) | September 30, 2022 | December 31, 2021 | |||||||||
Settlement Assets: | |||||||||||
Card settlements due from merchants, net of estimated losses | $ | 1,561 | $ | 537 | |||||||
Customer Account Balances: | |||||||||||
Cash and cash equivalents | 515,126 | 468,934 | |||||||||
Time deposits | — | 10,000 | |||||||||
Total settlement assets and customer account balances | $ | 516,687 | $ | 479,471 | |||||||
Settlement and Customer Account Obligations: | |||||||||||
Customer account obligations | $ | 515,126 | $ | 478,935 | |||||||
Due to customer payees(1) | 1,882 | 21,356 | |||||||||
Total settlement and customer account obligations | $ | 517,008 | $ | 500,291 |
(in thousands) | September 30, 2022 | December 31, 2021 | |||||||||
SMB Payments | $ | 120,636 | $ | 120,636 | |||||||
Enterprise Payments | 244,711 | 245,104 | |||||||||
Total | $ | 365,347 | $ | 365,740 |
(in thousands) | Amount | ||||
Balance at December 31, 2021 | $ | 365,740 | |||
Changes in the value of goodwill | — | ||||
Balance at March 31, 2022 | 365,740 | ||||
Changes in the value of goodwill | — | ||||
Balance at June 30, 2022 | 365,740 | ||||
Final purchase price adjustment for Finxera | (393) | ||||
Balance at September 30, 2022 | $ | 365,347 |
(in thousands, except weighted-average data) | September 30, 2022 | Weighted-average Useful Life | |||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||
ISO and referral partner relationships | $ | 175,300 | $ | (20,941) | $ | 154,359 | 14.8 | ||||||||||||||||
Residual buyouts | 132,997 | (71,182) | 61,815 | 6.2 | |||||||||||||||||||
Customer relationships | 95,566 | (80,254) | 15,312 | 8.0 | |||||||||||||||||||
Merchant portfolios | 76,423 | (40,087) | 36,336 | 6.7 | |||||||||||||||||||
Technology | 48,690 | (17,684) | 31,006 | 9.9 | |||||||||||||||||||
Non-compete agreements | 3,390 | (3,390) | — | 0.0 | |||||||||||||||||||
Trade names | 2,870 | (2,069) | 801 | 11.7 | |||||||||||||||||||
Money transmission licenses(1) | 2,100 | — | 2,100 | ||||||||||||||||||||
Total | $ | 537,336 | $ | (235,607) | $ | 301,729 | 9.9 |
(in thousands, except weighted-average data) | December 31, 2021 | Weighted-average Useful Life | |||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||
ISO and referral partner relationships | $ | 175,300 | $ | (11,679) | $ | 163,621 | 14.8 | ||||||||||||||||
Residual buyouts(1) | 126,225 | (56,186) | 70,039 | 6.4 | |||||||||||||||||||
Customer relationships | 95,566 | (70,883) | 24,683 | 8.1 | |||||||||||||||||||
Merchant portfolios | 76,016 | (30,879) | 45,137 | 6.7 | |||||||||||||||||||
Technology(2) | 48,690 | (15,039) | 33,651 | 9.9 | |||||||||||||||||||
Non-compete agreements(2) | 3,390 | (3,390) | — | 0.0 | |||||||||||||||||||
Trade names | 2,870 | (1,890) | 980 | 11.6 | |||||||||||||||||||
Money transmission licenses(3) | 2,100 | — | 2,100 | ||||||||||||||||||||
Total | $ | 530,157 | $ | (189,946) | $ | 340,211 | 9.7 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Amortization expense | $ | 15,452 | $ | 10,191 | $ | 45,773 | $ | 25,858 | |||||||||||||||
(in thousands) | September 30, 2022 | December 31, 2021 | |||||||||
Computer software | $ | 63,087 | $ | 52,715 | |||||||
Equipment | 12,916 | 12,255 | |||||||||
Leasehold improvements | 6,720 | 6,467 | |||||||||
Furniture and fixtures | 2,869 | 2,819 | |||||||||
Property, equipment and software | 85,592 | 74,256 | |||||||||
Less: accumulated depreciation | (55,819) | (49,023) | |||||||||
Property, equipment and software, net | $ | 29,773 | $ | 25,233 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Depreciation expense | $ | 2,365 | $ | 2,139 | $ | 6,902 | $ | 6,265 | |||||||||||||||
(in thousands) | |||||
Twelve months ending September 30, | |||||
2023 | $ | 986 | |||
2024 | 792 | ||||
2025 | 522 | ||||
2026 | 515 | ||||
2027 | 243 | ||||
After 2027 | — | ||||
Total | $ | 3,058 |
(in thousands) | September 30, 2022 | December 31, 2021 | |||||||||
Term facility - matures April 27, 2027, interest rates of 8.27% and 6.75% at September 30, 2022 and December 31, 2021, respectively | $ | 612,250 | $ | 616,900 | |||||||
Revolving credit facility - $40.0 million line, matures April 27, 2026, interest rates of 7.24% and 5.75% at September 30, 2022 and December 31, 2021, respectively | 6,000 | 15,000 | |||||||||
Total debt obligations | 618,250 | 631,900 | |||||||||
Less: current portion of long-term debt | (6,200) | (6,200) | |||||||||
Less: unamortized debt discounts and deferred financing costs | (18,982) | (21,595) | |||||||||
Long-term debt, net | $ | 593,068 | $ | 604,105 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Interest expense | $ | 13,303 | $ | 8,155 | $ | 36,571 | $ | 24,608 | |||||||||||||||
(in thousands) | Fair Value Hierarchy | September 30, 2022 | December 31, 2021 | ||||||||||||||
Contingent consideration, current portion | Level 3 | $ | 6,883 | $ | 4,006 | ||||||||||||
Contingent consideration, noncurrent portion | Level 3 | 3,870 | 6,680 | ||||||||||||||
Total contingent consideration | $ | 10,753 | $ | 10,686 |
(in thousands) | Contingent Consideration Liability | ||||
December 31, 2021 | $ | 10,686 | |||
Payment of contingent consideration | (415) | ||||
March 31, 2022 | 10,271 | ||||
Accretion of discount on contingent consideration | 602 | ||||
Fair value adjustments due to resolution of contingencies related to future payments | (48) | ||||
June 30, 2022 | 10,825 | ||||
Addition of contingent consideration due to acquisition | — | ||||
Accretion of discount on contingent consideration | 108 | ||||
Fair value adjustments due to resolution of contingencies related to future payments | 1,070 | ||||
Payment of contingent consideration | (1,250) | ||||
September 30, 2022 | $ | 10,753 |
(in thousands) | Contingent Consideration Liability | ||||
December 31, 2020 | $ | — | |||
Payment of contingent consideration | — | ||||
March 31, 2021 | — | ||||
Addition of contingent consideration due to acquisition | 4,700 | ||||
Payment of contingent consideration | — | ||||
June 30, 2021 | 4,700 | ||||
Addition of contingent consideration due to acquisition | 5,986 | ||||
Accretion of discount on contingent consideration | — | ||||
Fair value adjustments due to resolution of contingencies related to future payments | — | ||||
Payment of contingent consideration | — | ||||
September 30, 2021 | $ | 10,686 |
(in thousands) | Shares | Amount | |||||||||
December 31, 2021 | 225 | $ | 210,158 | ||||||||
Unpaid dividend on redeemable senior preferred stock | — | 4,090 | |||||||||
Accretion of discounts and issuance cost | — | 805 | |||||||||
March 31, 2022 | 225 | 215,053 | |||||||||
Unpaid dividend on redeemable senior preferred stock | — | 4,161 | |||||||||
Accretion of discounts and issuance cost | — | 817 | |||||||||
June 30, 2022 | 225 | $ | 220,031 | ||||||||
Unpaid dividend on redeemable senior preferred stock | — | 4,234 | |||||||||
Accretion of discounts and issuance cost | — | 830 | |||||||||
September 30, 2022 | 225 | $ | 225,095 |
(in thousands) | Shares | Amount | |||||||||
December 31, 2020 | — | $ | — | ||||||||
Proceeds from issuance of redeemable senior preferred stock, net of discount and issuance costs | 150 | $ | 131,426 | ||||||||
Unpaid dividend on redeemable senior preferred stock | — | 1,838 | |||||||||
Accretion of discounts and issuance cost | — | 498 | |||||||||
June 30, 2021 | 150 | 133,762 | |||||||||
Proceeds from issuance of redeemable senior preferred stock, net of discount and issuance costs | 75 | 68,183 | |||||||||
Unpaid dividend on redeemable senior preferred stock | — | 2,846 | |||||||||
Accretion of discounts and issuance cost | — | 527 | |||||||||
September 30, 2021 | 225 | $ | 205,318 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Dividends paid in cash | $ | 4,402 | $ | 2,440 | $ | 11,478 | $ | 4,015 | |||||||||||||||
Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock | 4,234 | 2,846 | 12,485 | 4,684 | |||||||||||||||||||
Dividends declared at the rate of 13.0% per year | $ | 8,636 | $ | 5,286 | $ | 23,963 | $ | 8,699 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Stock-based compensation expense | $ | 1,104 | $ | 935 | 4,204 | $ | 2,349 | ||||||||||||||||
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
SMB Payments | $ | 139,892 | $ | 124,737 | $ | 412,357 | $ | 354,149 | |||||||||||||||
B2B Payments | 4,868 | 4,181 | 16,088 | 11,722 | |||||||||||||||||||
Enterprise Payments | 21,657 | 3,624 | 57,641 | 4,982 | |||||||||||||||||||
Consolidated revenues | $ | 166,417 | $ | 132,542 | $ | 486,086 | $ | 370,853 | |||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||
SMB Payments | $ | 11,040 | $ | 11,049 | $ | 32,844 | $ | 30,130 | |||||||||||||||
B2B Payments | 295 | 73 | 441 | 220 | |||||||||||||||||||
Enterprise Payments | 6,203 | 939 | 18,599 | 939 | |||||||||||||||||||
Corporate | 279 | 269 | 791 | 834 | |||||||||||||||||||
Consolidated depreciation and amortization | $ | 17,817 | $ | 12,330 | $ | 52,675 | $ | 32,123 | |||||||||||||||
Operating (loss) income: | |||||||||||||||||||||||
SMB Payments | $ | 13,447 | $ | 14,647 | $ | 39,928 | $ | 42,380 | |||||||||||||||
B2B Payments | 217 | (29) | 1,289 | (417) | |||||||||||||||||||
Enterprise Payments | 9,312 | 1,229 | 19,504 | 1,564 | |||||||||||||||||||
Corporate | (8,896) | (7,597) | (22,755) | (23,345) | |||||||||||||||||||
Consolidated operating income | $ | 14,080 | $ | 8,250 | $ | 37,966 | $ | 20,182 |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Total operating income of reportable segments | $ | 22,976 | $ | 15,847 | $ | 60,721 | $ | 43,527 | |||||||||||||||
Corporate | (8,896) | (7,597) | (22,755) | (23,345) | |||||||||||||||||||
Interest expense | (13,412) | (8,155) | (37,282) | (24,608) | |||||||||||||||||||
Debt modification and extinguishment costs | — | — | — | (8,322) | |||||||||||||||||||
Other income, net | 231 | 146 | 311 | 92 | |||||||||||||||||||
Income tax expense | (1,691) | (790) | (1,833) | (49) | |||||||||||||||||||
Net loss | $ | (792) | $ | (549) | $ | (838) | $ | (12,705) | |||||||||||||||
(in thousands except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss | $ | (792) | $ | (549) | $ | (838) | $ | (12,705) | |||||||||||||||
Less: Dividends and accretion attributable to redeemable senior preferred stockholders | (9,466) | (5,813) | (26,415) | (9,724) | |||||||||||||||||||
Less: Non-controlling interest preferred unit redemptions | — | — | — | (10,777) | |||||||||||||||||||
Net loss attributable to common stockholders | $ | (10,258) | $ | (6,362) | $ | (27,253) | $ | (33,206) | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic and diluted: | |||||||||||||||||||||||
Weighted-average common shares outstanding(1) | 77,984 | 71,979 | 78,392 | 69,689 | |||||||||||||||||||
Loss per common share | $ | (0.13) | $ | (0.09) | $ | (0.35) | $ | (0.48) | |||||||||||||||
Nine Months Ended September 30, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Outstanding warrants on Common Stock(1) | 3,557 | 3,557 | |||||||||
Outstanding options and warrants issued to adviser(2) | 600 | 600 | |||||||||
Restricted stock awards(3) | 1,126 | 1,202 | |||||||||
Liability-classified restricted stock units | — | 135 | |||||||||
Outstanding stock option awards(3) | 2,292 | 1,232 | |||||||||
Total | 7,575 | 6,726 |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Revenue Type: | |||||||||||||||||||||||||||||||||||
Merchant card fees | $ | 137,659 | $ | 122,175 | $ | 15,484 | $ | 405,404 | $ | 348,244 | $ | 57,160 | |||||||||||||||||||||||
Money transmission services revenue | 18,291 | 2,873 | 15,418 | 51,757 | 2,873 | 48,884 | |||||||||||||||||||||||||||||
Outsourced services and other services | 7,933 | 5,778 | 2,155 | 21,917 | 14,981 | 6,936 | |||||||||||||||||||||||||||||
Equipment | 2,534 | 1,716 | 818 | 7,008 | 4,755 | 2,253 | |||||||||||||||||||||||||||||
Total revenues | $ | 166,417 | $ | 132,542 | $ | 33,875 | $ | 486,086 | $ | 370,853 | $ | 115,233 |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||
Cost of revenue (excludes depreciation and amortization) | $ | 107,958 | $ | 92,833 | $ | 15,125 | $ | 320,187 | $ | 264,527 | $ | 55,660 | |||||||||||||||||||||||
Salary and employee benefits | 16,384 | 11,909 | 4,475 | 48,231 | 31,808 | 16,423 | |||||||||||||||||||||||||||||
Depreciation and amortization | 17,817 | 12,330 | 5,487 | 52,675 | 32,123 | 20,552 | |||||||||||||||||||||||||||||
Selling, general and administrative | 10,178 | 7,220 | 2,958 | 27,027 | 22,213 | 4,814 | |||||||||||||||||||||||||||||
Total operating expenses | $ | 152,337 | $ | 124,292 | $ | 28,045 | $ | 448,120 | $ | 350,671 | $ | 97,449 |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Other (expense) income | |||||||||||||||||||||||||||||||||||
Interest expense | $ | (13,412) | $ | (8,155) | $ | (5,257) | $ | (37,282) | $ | (24,608) | $ | (12,674) | |||||||||||||||||||||||
Debt extinguishment and modification costs | — | — | — | — | (8,322) | 8,322 | |||||||||||||||||||||||||||||
Other income, net | 231 | 146 | 85 | 311 | 92 | 219 | |||||||||||||||||||||||||||||
Total other expense, net | $ | (13,181) | $ | (8,009) | $ | (5,172) | $ | (36,971) | $ | (32,838) | $ | (4,133) |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 899 | $ | 241 | $ | 658 | $ | 995 | $ | (12,656) | $ | 13,651 | |||||||||||||||||||||||
Income tax expense | $ | 1,691 | $ | 790 | $ | 901 | $ | 1,833 | $ | 49 | $ | 1,784 | |||||||||||||||||||||||
Effective tax rate | 188.1 | % | 327.8 | % | 184.2 | % | (0.4) | % |
(in thousands) | Three Months Ended September 30, 2021 | ||||||||||||||||
SMB Payments(1) | B2B Payments(2) | Enterprise Payments(3) | |||||||||||||||
Revenue: | |||||||||||||||||
Restated | $ | 124,737 | $ | 4,181 | $ | 3,624 | |||||||||||
Historically reported | 124,027 | 4,181 | 4,334 | ||||||||||||||
Difference | $ | 710 | $ | — | $ | (710) | |||||||||||
Operating Income (Loss): | |||||||||||||||||
Restated | $ | 14,647 | $ | (29) | $ | 1,229 | |||||||||||
Historically reported | 14,656 | (29) | 1,220 | ||||||||||||||
Difference(4) | $ | (9) | $ | — | $ | 9 | |||||||||||
Depreciation and Amortization: | |||||||||||||||||
Restated | $ | 11,049 | $ | 73 | $ | 939 | |||||||||||
Historically reported | 10,971 | 73 | 1,017 | ||||||||||||||
Difference | $ | 78 | $ | — | $ | (78) |
(in thousands) | Nine Months Ended September 30, 2021 | ||||||||||||||||
SMB Payments(1) | B2B Payments(2) | Enterprise Payments(3) | |||||||||||||||
Revenue: | |||||||||||||||||
Restated | $ | 354,149 | $ | 11,722 | $ | 4,982 | |||||||||||
Historically reported | 352,045 | 11,722 | 7,086 | ||||||||||||||
Difference | $ | 2,104 | $ | — | $ | (2,104) | |||||||||||
Operating Income (Loss): | |||||||||||||||||
Restated | $ | 42,380 | $ | (417) | $ | 1,564 | |||||||||||
Historically reported | 42,467 | (417) | 1,477 | ||||||||||||||
Difference | $ | (87) | $ | — | $ | 87 | |||||||||||
Depreciation and Amortization: | |||||||||||||||||
Restated | $ | 30,130 | $ | 220 | $ | 939 | |||||||||||
Historically reported | 29,847 | 220 | 1,222 | ||||||||||||||
Difference | $ | 283 | $ | — | $ | (283) |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Revenue | $ | 139,892 | $ | 124,737 | $ | 15,155 | $ | 412,357 | $ | 354,149 | $ | 58,208 | |||||||||||||||||||||||
Operating expenses | 126,445 | 110,090 | 16,355 | 372,429 | 311,769 | 60,660 | |||||||||||||||||||||||||||||
Operating income | $ | 13,447 | $ | 14,647 | $ | (1,200) | $ | 39,928 | $ | 42,380 | $ | (2,452) | |||||||||||||||||||||||
Operating margin | 9.6 | % | 11.7 | % | 9.7 | % | 12.0 | % | |||||||||||||||||||||||||||
Depreciation and amortization | $ | 11,040 | $ | 11,049 | $ | (9) | $ | 32,844 | $ | 30,130 | $ | 2,714 | |||||||||||||||||||||||
Key Indicators: | |||||||||||||||||||||||||||||||||||
Merchant bankcard processing dollar value | $ | 15,098,450 | $ | 13,830,550 | $ | 1,267,900 | $ | 44,577,857 | $ | 39,602,577 | $ | 4,975,280 | |||||||||||||||||||||||
Merchant bankcard transaction volume | 165,796 | 153,053 | 12,743 | 476,084 | 431,369 | 44,715 |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Revenue | $ | 4,868 | $ | 4,181 | $ | 687 | $ | 16,088 | $ | 11,722 | $ | 4,366 | |||||||||||||||||||||||
Operating expenses | 4,651 | 4,210 | 441 | 14,799 | 12,139 | 2,660 | |||||||||||||||||||||||||||||
Operating income (loss) | $ | 217 | $ | (29) | $ | 246 | $ | 1,289 | $ | (417) | $ | 1,706 | |||||||||||||||||||||||
Operating margin | 4.5 | % | (0.7) | % | 8.0 | % | (3.6) | % | |||||||||||||||||||||||||||
Depreciation and amortization | $ | 295 | $ | 73 | $ | 222 | $ | 441 | $ | 220 | $ | 221 | |||||||||||||||||||||||
Key Indicators: | |||||||||||||||||||||||||||||||||||
Merchant bankcard processing dollar value | $ | 116,348 | $ | 87,116 | $ | 29,232 | $ | 380,217 | $ | 226,056 | $ | 154,161 | |||||||||||||||||||||||
Merchant bankcard transaction volume | 63 | 55 | 8 | 239 | 143 | 96 |
(in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | 2022 | 2021 | $ Change | ||||||||||||||||||||||||||||||
Revenue | $ | 21,657 | $ | 3,624 | $ | 18,033 | $ | 57,641 | $ | 4,982 | $ | 52,659 | |||||||||||||||||||||||
Operating expenses | 12,345 | 2,395 | 9,950 | 38,137 | 3,418 | 34,719 | |||||||||||||||||||||||||||||
Operating income | $ | 9,312 | $ | 1,229 | $ | 8,083 | $ | 19,504 | $ | 1,564 | $ | 17,940 | |||||||||||||||||||||||
Operating margin | 43.0 | % | 33.9 | % | 33.8 | % | 31.4 | % | |||||||||||||||||||||||||||
Depreciation and amortization | $ | 6,203 | $ | 939 | $ | 5,264 | $ | 18,599 | $ | 939 | $ | 17,660 | |||||||||||||||||||||||
Key Indicators: | |||||||||||||||||||||||||||||||||||
Merchant bankcard processing dollar value | $ | 585,382 | $ | 23 | $ | 585,359 | $ | 1,189,034 | $ | 23 | $ | 1,189,011 | |||||||||||||||||||||||
Merchant bankcard transaction volume | 808 | — | 808 | 2,023 | — | 2,023 | |||||||||||||||||||||||||||||
Average billed clients | 387,384 | 342,789 | 44,595 | 363,993 | 349,595 | 14,398 |
Nine Months Ended September 30, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | 50,558 | $ | (2,567) | |||||||
Investing activities | (21,095) | (462,878) | |||||||||
Financing activities | (8,099) | 871,010 | |||||||||
Net increase in cash and cash equivalents and restricted cash | $ | 21,364 | $ | 405,565 |
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
July 1-31, 2022 | 395,743 | $ | 4.02 | 391,921 | 1,228,834 | |||||||||||||||||||||
August 1-31, 2022 | 103,305 | $ | 4.53 | 103,305 | 1,125,529 | |||||||||||||||||||||
September 1-30, 2022 | 131,447 | $ | 4.07 | 131,447 | 994,082 | |||||||||||||||||||||
Total | 630,495 | $ | 4.09 | 626,673 |
Exhibit | Description | |||||||
31.1 * | ||||||||
31.2 * | ||||||||
32 ** | ||||||||
101.INS * | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH * | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.LAB * | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document |
November 10, 2022 | /s/ Thomas C. Priore Thomas C. Priore President, Chief Executive Officer and Chairman (Principal Executive Officer) | ||||
November 10, 2022 | /s/ Timothy M. O'Leary Tim O'Leary Chief Financial Officer (Principal Financial Officer) |
1 Year AdTheorent Chart |
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